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The Sale of Business Assets

Montgomery Hughes died leaving equal proportions of his estate, which included numerous small parcels of land in the local area, to his three surviving sons.  His will nominated Misha (a business colleague) as the executor for the estate.  Although reluctant to fulfil the role, due to her business and family commitments, she accepted out of respect for Montgomery.   In the months that followed, probate was successfully granted, but the beneficiaries heard little from Misha and grew increasingly concerned about the efficient administration of the estate.  In addition, they had became aware of rumours that Misha had been let several of the estates properties and was claiming rents as payment for her role.  After several attempts to contact Misha the beneficiaries filed an application to the court to suspend any further administration of the estate and to examine the conduct of the executor.  During an initial hearing it became clear that there had been no breach of the executor’s duties, but it was unclear why Misha had taken a number of important decisions regarding the estate without explaining her actions to the beneficiaries.  Despite the court’s intervention the beneficiaries still had doubts about Misha’s capacity to act as executor.  One of the brothers had had previous experience of mediation, in relation to a commercial dispute, and suggested that mediation might be a way of making progress.

A mediator was appointed and the court action was suspended to explore the possibility of a mediated resolution.  The mediator initially spoke to all the beneficiaries and the executor by telephone.  The following week a joint meeting was held that involved the parties at a neutral venue.  The three sons began the meeting by stating their utter frustration at the lack of communication and confronting Misha with their fears that the mismanagement of their father’s estate, accusing her of benefitting from the proceeds of the lettings.  Misha explained that she had decided to go ahead with the lettings as a developer had expressed an interest in buying all of the land, for a much higher price than the individual units.  But her lack of time and inexperience in property sales had considerably delayed the negotiation of a contract.  However, she assured the sons that any revenue from the lettings would be returned to the estate.   When asked about the lack of communication, Misha explained that the executor’s role was proving too much for her, as she had her own business to run and family to support.  She did not feel that she could ask for help, or raise her concerns about the workload, as her credibility as a local business woman would be at stake.

At the end of the mediation everyone agreed that things could not continue.   It was decided that Misha should approach the court and ask to be relieved of her role as executor, giving reasons she felt comfortable with.  One of the beneficiaries would propose that he took over the role.


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